Hi DWickett, it sounds like you’re dealing with a payroll tax adjustment. These situations can be tricky, but a journal entry can help you offset that discrepancy or deficiency in QuickBooks Online and keep your accounts balanced.
To create a journal entry, here's how:
1. Hover over to +Create and select Journal entry.
2. Ensure you have an appropriate income account set up (CRA Tax Adjustment or Prior Year Tax Credit). If none, create using + Add new in account dropdown.
3. Input the following:
- Debit the applicable payroll tax liability account (CPP Payable, EI Payable, or Federal Tax Payable) for the exact amount authorized by CRA.
- Credit the income or other income account (CRA Tax Adjustment) for the same amount.
4. Add a memo explaining the adjustment (CRA-authorized reduction for payroll tax from 2024).
5. Then Save and close.
This journal entry will record the CRA-approved credit, offset the QBO deficiency, and ensure your reconciliation balances properly for 2025.
Let me know if you need any further clarification. We're here to help.
